{"id":3567,"date":"2014-04-21T00:01:57","date_gmt":"2014-04-21T07:01:57","guid":{"rendered":"https:\/\/climatepolicyinitiative.org\/?p=3567"},"modified":"2026-04-19T04:15:10","modified_gmt":"2026-04-19T04:15:10","slug":"adjustments-to-indian-renewable-energy-policies-could-save-up-to-78-in-subsidies","status":"publish","type":"post","link":"https:\/\/www.climatepolicyinitiative.org\/pt-br\/adjustments-to-indian-renewable-energy-policies-could-save-up-to-78-in-subsidies\/","title":{"rendered":"Adjustments to Indian renewable energy policies could save up to 78% in subsidies"},"content":{"rendered":"

Recently, the Government of India announced plans<\/a> to award licenses for an additional one gigawatt of solar in the next year \u2013 about half the capacity of the Hoover Dam and enough to meet the energy needs of two million people. This move is part of India\u2019s already ambitious targets for renewable energy that aim to address rising energy demand, decrease the country\u2019s dependence on fossil fuel imports, and mitigate climate change.<\/p>\n

To ensure the country meets these targets, India provides a package of renewable energy support policies that includes state-level feed-in tariffs and federal subsidies, which are in the form of a generation based incentive \u2013 a per unit subsidy; viability gap funding \u2013 a capital grant; and accelerated depreciation.<\/p>\n

However, given the ambitious goals, but limited budget in India, the cost-effectiveness<\/i> of these policies is an important factor for policymakers.<\/p>\n

Our recent study \u201cSolving India\u2019s Renewable Energy Financing Challenge: Which Federal Policies can be Most Effective?<\/a>\u201d took on the question of cost-effectiveness by comparing a range of policy alternatives to the status quo.<\/p>\n

Our findings were striking. We found that a policy that both reduces the cost of debt and extends its tenor is the most cost-effective. In fact, for wind energy, reducing debt cost to 5.9% and extending tenor by 10 years can cut the cost of total federal and state support by up to 78%. For solar energy, which is more capital-intensive, reducing debt cost to 1.2% and extending tenor by 10 years can cut the cost of support by 28%.<\/p>\n

Still, while cost-effectiveness is clearly important, it may be only one of the many issues federal policymakers factor into their decisions. Recognizing this, we looked at a range of policies across the factors policymakers have indicated are important drivers of their policy choices:<\/p>\n